Honda Vietnam Unit Has Been Forced

Honda Motor Co Vietnam motorcycle unit has been forced to cease operations after Hanoi restricted the import of auto parts. Production at Honda Vietnam has since remained suspended. The decision was based on Vietnam's efforts to promote local auto parts makers by protecting them from imports. They are continuing negotiations with local authorities, requesting an increase in the limit. Earlier this month, Vietnam's Ministry of Trade said Honda Vietnam's import quota on motorcycle parts had been reduced to 280,000 for 2002. Honda Vietnam, which began mass production in December 1997, is now the country's largest motorcycle maker. Honda Vietnam is a joint venture between Honda Group and the Vietnam Engineering and Agriculture Machinery Corporation, which holds 30% of the equity. The company produces some 600,000 motorcycles a year, and in June began exporting its top-of-the-range Honda Wave "Alpha" bike to the Philippines, marking its first venture into the export market.

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